Why Non-Executive Directors need courage and integrity but shouldn’t hedge popularity

We all might be forgiven for thinking that our political masters have been courting popularity at the expense of practicality and safety recently, especially when it comes to COVID.  First they grant people a Christmas meet up, then they shorten it and finally they suggest perhaps a Christmas bubble is not a good idea after all but that it is up to people to act responsibly and use their common sense.  This lack of leadership and accountability rather reminded me of two principles I read about when studying for my MBA:

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Evaluating the evaluators

In the latest annual review of Corporate Governance conducted by Grant Thornton they noted that the shape of the board evaluation market was changing. In the past a small number of providers dominated the market – especially for companies in the FTSE 350. In 2018 one provider conducted 30% of all FTSE 350 Board evaluations. Last year, whilst Grant Thornton found that the top two providers were still responsible 38% of the market, 34 organisations were working with FTSE 350 companies on their board evaluations – including divisions of accounting firms, search companies, academics and one-person specialist firms. In the wider market for board evaluation amongst public sector bodies and charities the range of providers is even more diverse.

The breadth of the market and the low barriers to entry mean that for a chairman or company secretary who is thinking about issuing an ITT or selecting a supplier for an upcoming evaluation market there are a lot of different approaches and people with very diverse experience to choose from. Whilst this diversity could be seen as enabling competition and innovation it can also be very confusing and make the selection process for what is a significant and sensitive piece of work in the board lifecycle seem like a bit of a lottery. And with those low barriers to entry meaning it’s difficult to maintain high quality standards across the market a selection lottery is not what a board wants when choosing an evaluator. Continue reading “Evaluating the evaluators”

Boards need to be digital savvy but does that mean they really need a digital expert as a non-executive director?

One of the common features of board effectiveness reviews is to assess the composition of the board: does it have the right mix in terms of skills and experience? Is it diverse in the widest definition of that word? What will the board need for the future challenges of leading the company?

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The mediator in the boardroom

A mediator in the boardroom? You might question whether a mediator is ever needed around the boardroom table – after all, aren’t boards just there to endorse what the CEO says? Of course, that is not really the case. While there have been some recent examples of boards sadly lacking in challenging the executive, or showing the requisite leadership, they are the minority rather than the norm. That is not to say things can’t improve, they can.

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